Question 1

Oligopolies are industries containing only a few large firms

Accepted Answer

A)  whose decisions are consciously linked.
B)  and each faces a horizontal demand curve.
C)  that can ignore other firms' reactions as they price, produce, and market their goods.
D)  but each firm is small relative to the market.
E)  that maximize output rather than profits.

Question 2

Which statement is false?

Accepted Answer

A)  The 1961 electrical machinery anti-trust case is an example of covert collusion.
B)  Two of the companies involved in the electrical machinery case were charged with price fixing on turbine generators 11 years after being convicted of price fixing and illegal market-sharing.
C)  The conviction of high-ranking company executives in the 1961 electrical machinery case effectively ended covert conspiracies in this country.
D)  In 1996 the Archer Daniels Midland Company pleaded guilty and paid a $100 million criminal fine for its role in two international conspiracies to fix prices and eliminate competition in the lysine and citric acid markets.

Question 3

Use the following Table to answer the question :

-According to the Herfindahl-Hirschman Index, which is the more concentrated industry?

Accepted Answer

A)  Industry X with an index of 2,400.
B)  Industry Y with an index of 2,738.
C)  Both industries have the same indices.
D)  There is no way to determine the Herfindahl Indices of these industries with this data.

Question 4

Use the following Table to answer the question :

-Given the information in the table below, calculate (a) the concentration ratio; and (b) the Herfindahl-Hirschman index.

Accepted Answer

(a) 20 + 2...

Question 5

Oligopoly is characterized by

Accepted Answer

A)  some industries producing differentiated products.
B)  some industries producing identical products.
C)  few firms.
D)  high barriers to entry.
E)  all of the choices.

Question 6

Collusion is most likely to succeed when there are

Accepted Answer

A)  few firms and low barriers to entry.
B)  many firms and low barriers to entry.
C)  few firms and high barriers to entry.
D)  many firms and high barriers to entry.

Question 7

The kinked demand curve depicts

Accepted Answer

A)  cut-throat competition.
B)  cartels.
C)  collusive oligopoly.
D)  price leadership.

Question 8

Which of the following countries is not an OPEC member?

Accepted Answer

A)  Saudi Arabia
B)  Iran
C)  Venezuela
D)  Norway

Question 9

Which of the following is a shortcoming of concentration ratios?

Accepted Answer

A)  The measurement generally does not include foreign imports.
B)  The measurement is based on all firms of the industry, no matter how small.
C)  The measurement is only based on the top ten firms in an industry.
D)  The measurement includes foreign imports.

Question 10

Use the following Figure to answer the question :

-If the firm were a perfect competitor in the long run, how much would its output be?

Accepted Answer

The answer of Use the following Figure to answer the...

Question 11

Every oligopolist

Accepted Answer

A)  is part of a cartel.
B)  colludes openly.
C)  can ignore the actions of her competitors.
D)  takes into account the actions of her competitors.

Question 12

An industry with a concentration ratio of 60 would have at least ____ firms.

Accepted Answer

A)  2
B)  4
C)  5
D)  7

Question 13

The strong interdependence of oligopolistic firms is shown by

Accepted Answer

A)  their willingness to change prices frequently.
B)  their reluctance to advertise.
C)  their inability to form a price conspiracy.
D)  the vulnerability of their sales to the actions of their rivals.

Question 14

An industry with a Herfindahl-Hirschman index of 10,000 would have no more than ______ firm(s) .

Accepted Answer

A)  1
B)  2
C)  5
D)  100

Question 15

Use the following Figure to answer the question :

-The graph shown here is that of

Accepted Answer

A)  either a colluding oligopolist or an oligopolist engaged in cut-throat competition.
B)  neither a cut-throat oligopolist nor a colluding oligopolist.
C)  a cut-throat oligopolist.
D)  a colluding oligopolist.

Question 16

An example of an oligopoly market would be one in which ___ firm(s)  sell(s)  ____% of the output.

Accepted Answer

A)  1; 95
B)  3; 10
C)  4; 80
D)  250; 35
E)  1,000; 99

Question 17

Use the following Table to answer the question :

-How much is the concentration ratio in this industry?

Accepted Answer

The answer of Use the following Table to answer the...

Question 18

Statement I. Most of American industry is engaged in cutthroat competition. Statement II. The cigarette and auto industries have high concentration ratios.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 19

If one of the nation's leading banks raises the prime rate of interest by a half of a percent, and within 24 hours all of the other U.S. banks raise their prime rates by the same percentage, this behavior would be

Accepted Answer

A)  an example of covert collusion.
B)  proof of the U.S.bank cartel at work.
C)  an example of illegal cutthroat price competition at work.
D)  an example of price leadership.

Question 20

Which statement is false?

Accepted Answer

A)  The kinked demand curve represents oligopoly with collusion.
B)  The kinked demand curve is associated with sticky prices.
C)  Administered prices occur more frequently under oligopoly than under other forms of competition.
D)  None of these statements are false.

Exam 12: Oligopoly

Use the following Table to answer the question : -Given the information in the table below, calculate (a) the concentration ratio; and (b) the Herfindahl-Hirschman index.

Correct Answerverified(a) 20 + 2...View AnswerShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

If one of the nation's leading banks raises the prime rate of interest by a half of a percent, and within 24 hours all of the other U.S. banks raise their prime rates by the same percentage, this behavior would be

Correct AnswerverifiedShow Answer

An industry with a concentration ratio of 60 would have at least ____ firms.

Correct AnswerverifiedShow Answer

Statement I. Most of American industry is engaged in cutthroat competition. Statement II. The cigarette and auto industries have high concentration ratios.

Correct AnswerverifiedShow Answer

Use the following Table to answer the question : -How much is the concentration ratio in this industry?

Correct AnswerverifiedShow Answer

Use the following Figure to answer the question : -If the firm were a perfect competitor in the long run, how much would its output be?

Correct AnswerverifiedShow Answer

An example of an oligopoly market would be one in which ___ firm(s) sell(s) ____% of the output.

Correct AnswerverifiedShow Answer

Oligopolies are industries containing only a few large firms

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Use the following Table to answer the question : -According to the Herfindahl-Hirschman Index, which is the more concentrated industry?

Correct AnswerverifiedShow Answer

The kinked demand curve depicts

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An industry with a Herfindahl-Hirschman index of 10,000 would have no more than ______ firm(s) .

Correct AnswerverifiedShow Answer

Which of the following countries is not an OPEC member?

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Use the following Figure to answer the question : -The graph shown here is that of

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Every oligopolist

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Which statement is false?

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Which of the following is a shortcoming of concentration ratios?

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Oligopoly is characterized by

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Collusion is most likely to succeed when there are

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The strong interdependence of oligopolistic firms is shown by

Correct AnswerverifiedShow Answer

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(a) 20 + 2...
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An example of an oligopoly market would be one in which _ firm(s) sell(s) __% of the output.

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